Exhibit 4.2
EMPLOYEE INCENTIVE AND NON-QUALIFIED
STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ____ day of __________, 19__,
between Hondo Oil & Gas Company, a Delaware corporation (the
"Corporation"), and ____________________ (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Hondo Oil & Gas Company 1993 Stock
Incentive Plan (the "Plan"), the Corporation has granted to the Employee
effective as of the ___ day of _______, 19__ (the "Award Date") an
option to purchase all or any part of ____________ authorized but
unissued or treasury shares of Common Stock, $1.00 par value, of the
Corporation upon the terms and conditions set forth herein and in the
Plan.
NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom,
the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned to such terms in the
Plan.
2. Grant of Option. This Agreement evidences the Corporation's grant
to the Employee of the right and option to purchase, on the terms
and conditions set forth herein and in the Plan, all or any part of
an aggregate of ___________ shares of the Common Stock at the price
of $___ per share (the "Option"), exercisable from time to time,
subject to the provisions of this Agreement and the Plan, prior to
the close of business on the day before the fifth anniversary of
the Award Date (the "Expiration Date"). Such price equals not less
than the Fair Market Value of the Corporation's Common Stock as of
the Award Date. It is the intent of the Corporation that this
Option constitute (to the extent permitted by law) an incentive
stock option ("ISO") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended ("Code") with respect to
________________ of the shares subject to the Option and a non-
qualified option with respect to the remainder of the shares
subject to the Option.
3. Exercisability of Option. Except as may be permitted by or
pursuant to the Plan or by resolution of the Committee adopted
after the date hereof, no shares may be purchased by exercise of
the Option until the expiration of six months after the Award Date.
The Option may be exercised in installments as to 50% of the
aggregate number of shares set forth in Section 2 hereof (subject
to adjustment) on and after the date which is 6 months after the
Award Date and as to an additional 50% of such aggregate number of
such shares (subject to adjustment) on and after the date which is
18 months after the Award Date.
To the extent the Employee does not in any period purchase all or
any part of the shares to which the Employee is entitled, the
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Employee has the right cumulatively thereafter to purchase any
shares not so purchased and such right shall continue until the
Option terminates or expires. Fractional share interests shall be
disregarded, but may be cumulated. No fewer than 100 shares may be
purchased at any one time, unless the number purchased is the total
number at the time available for purchase under the Option.
4. Limitation on Exercise of Option as an ISO. In the event the
Employee is granted incentive stock options (whether under this
Award Agreement or any other incentive stock option agreement) and
the aggregate fair market value (determined as of the respective
dates of grant of such options) of the Common Stock with respect to
which such options are first exercisable in any calendar year
exceeds $100,000, the most recently granted options shall be
treated as non-qualified stock options to the extent of the excess.
In addition, in the case of simultaneously granted options, the
Corporation may, in the manner and to the extent permitted by law,
designate which shares are to be treated as stock acquired pursuant
to the exercise of an incentive stock option.
5. Method of Exercise of Option. The Option shall be exercisable by
the delivery to the Corporation of a written notice stating the
number of shares to be purchased pursuant to the Option and
accompanied by payment made in accordance with and in a form
permitted in Section 2.2(b) of the Plan for the full purchase price
of the shares to be purchased, subject to such further limitations
and rules or procedures as the Committee may from time to time
establish as to any non-cash payment and as to the tax withholding
requirements of Section 4.5 of the Plan. Shares delivered in
payment of the exercise price must have been owned by Employee for
at least six months prior to the exercise. In addition, the
Employee (or the Employee's Beneficiary or Personal Representative)
shall furnish any written statements required pursuant to Section
4.4 of the Plan.
6. Effect of Termination of Employment or Death; Change in Subsidiary
Status. The Option and all other rights hereunder, to the extent
not exercised, shall terminate and become null and void at such
time as the Employee ceases to be employed by either the
Corporation or any Subsidiary, except that
a) if such employment is terminated by reason of voluntary
retirement or resignation or by the Company (other than
pursuant to a dismissal for cause or in anticipation of such a
dismissal (as determined by the Committee in its sole
discretion) or in the circumstances described in subsections
(b) and (c) below), Employee may at any time within a period
of three months after such termination exercise the Option to
the extent the Option was exercisable at the date of such
termination;
b) if the Employee becomes permanently disabled (within the
meaning of Code Section 22(e)(3) or as otherwise defined by
the Committee) while in the employ of the Corporation or any
Subsidiary, or within three months after a termination
described in subsection (a) of this Section 6, then the Option
may be exercised within a period of one year after Employee's
termination from employment, to the extent that the Option was
exercisable on such date; and
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c) if the Employee dies while in the employ of the Corporation or
within three months after a termination described in
subsections (a) and (d) of this Section 6, then the Option may
be exercised within a period of one year after Employee's
termination from employment, to the extent the Option was
exercisable on such date;
provided, however, that in no event may the Option be exercised by
anyone under this Section or otherwise after the Expiration Date.
If Employee is employed by an entity which ceases to be a
Subsidiary, such event shall be deemed for purposes of this Section
6 to be a termination of employment described in subsection (a) in
respect of Employee. Absence from work caused by military service
or authorized sick leave shall not be considered as a termination
of employment for purposes of this Section.
7. Consideration to Corporation. In consideration of the granting of
this Option by the Corporation, Employee agrees to render faithful
and efficient services to the Corporation or its subsidiaries, with
such duties and responsibilities as the Corporation or its
subsidiaries shall from time to time prescribe, for a period of at
least one (1) year from the date this Option is granted.
8. Termination of Option Under Certain Events. As permitted by
Section 4.2(c) of the Plan, the Committee retains the right to
terminate the Option to the extent not previously exercised upon an
event or transaction which the Corporation does not survive.
9. Non-Transferability of Option. The Option and any other rights of
the Employee under this Agreement or the Plan are nontransferable
as provided in Section 1.9 of the Plan.
10. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Corporation at its
principal office located at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000;
Xxxxxxx, Xxxxx 00000, to the attention of the Corporate Secretary
and to the Employee at the address given beneath the Employee's
signature hereto, or at such other address as either party may
hereafter designate in writing to the other.
11. Plan. The Option and all rights of Employee thereunder are subject
to, and the Employee agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, incorporated herein by
this reference, to the extent such provisions are applicable to
options granted to Eligible Employees. The Employee acknowledges
receipt of a copy of the Plan, which is made a part hereof by this
reference, and agrees to be bound by the terms thereof. Unless
otherwise expressly provided in other Sections of this Agreement,
provisions of the Plan that confer discretionary authority on the
Committee do not (and shall not be deemed to) create any rights in
the Employee unless such rights are expressly set forth herein or
are otherwise in the sole discretion of the Committee so conferred
by appropriate action of the Committee under the Plan after the
date hereof.
12. Notice of Disposition. The Employee agrees to notify the
Corporation of any sale or other disposition of any shares of
Common Stock received upon exercise of the Option, if such sale or
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disposition occurs within two years after the Award Date or within
one year after the date of such exercise.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Employee has
hereunto set his or her hand.
HONDO OIL & GAS COMPANY
(a Delaware corporation)
By _____________________
Title _____________________
EMPLOYEE
_________________________
(Signature)
_________________________
(Print Name)
_________________________
(Address)
_________________________
(City, State, Zip Code)
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CONSENT OF SPOUSE
In consideration of the execution of the foregoing Stock Option
Agreement by Hondo Oil & Gas Company, I, _____________, the spouse of
the Employee herein named, do hereby join with my spouse in executing
the foregoing Stock Option Agreement and do hereby agree to be bound by
all of the terms and provisions thereof and of the Plan.
DATED:___________, 19______
______________________
(Signature of Spouse)
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